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Wednesday, July 16, 2008 7:16 PM EDT

Marathon oil drilling meeting to continue

 
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WHITESVILLE - A six-hour meeting between a state chief administrative law judge, lawyers representing an oil drilling company, property owners in the Whitesville gas and oil field and Department of Environmental Conservation officials will resume this morning as state officials decide on the request of East Resources Inc. to loosen up drilling restrictions.

Chief Administrative Law Judge James T. McClymonds presided over the meeting at the Whitesville Central School gymnasium, where discussions took place that could lead to a literal change in the landscape in the valley village and surrounding areas.

East Resources plans to drill on over 20,000 acres in the region, but several laws stand in the way of the company’s interest in the Whitesville oil field.

Typically, a well that produces gas produces oil as well, and vice-versa, officials said.

According to current state law, if a well produces more than 2,000 cubic feet of gas per barrel of oil, it is technically considered a gas well. If it produces less than 2,000 cubic feet of gas per barrel of oil, it is considered an oil well.

This determination is important, because current state law prohibits both gas and oil wells from being placed within 40 acres, or about 1,320 feet of one another.

However, a bill that has passed the New York state Assembly and Senate includes a provision that eliminates the spacing needs between oil wells, but not gas wells.

East Resources requests the state change its standards for oil well status to 165,000 cubic feet of gas per barrel of oil, thereby eliminating spacing concerns.

East Resources attorney Tom West said a change in the law would open up opportunities for property owners to earn money for the gas and oil below their land.

“We have a very different resource to try and capture any petroleum from,” Mr. West said. “If we don’t allow the gas to evacuate, it will reduce the pressure underground, and gas won’t come through the stone.

“165,000 (cubic) feet-per-barrel is appropriate to be applied in this circumstance,” he said.

However, a request to change the oil-to-gas restrictions by 80 percent struck DEC officials as curious.

“It is strange to ask for 80 times the regulatory standards,” DEC attorney Jennifer Harry said.

More wells and drilling means more underground activity that could disrupt neighboring wells and property, and possibly cause a permanent loss in resources, Ms. Harry said.

“If gas is produced too quickly, commercial quantities of oil would be lost into the ground,” she said.

Mr. West countered that East Resources is committed to not wasting any resources.

“East Resources is in the business of recovering oil and gas. We want to recover as much as possible,” he said.

The meeting moved on to allow several entities to give their bid at party status on East Resources’ planned development.

Potential parties include East Resources, environmental protection group The Sierra Club, a contingent of local property owners known as P.O.W.E.R., and property owner Dan Dempsey. Representatives from each entity argued their case for why they should be a party to the project.

The meeting closed due to time, and will continue this morning to determine party status. The determination on East Resources’ request in the change of laws will be pending review following the meeting.

(Find out what property owners in and around the oil fields of Whitesville think about the growing interest in the region’s oil and gas in Thursday’s edition of the Olean Times Herald. Contact reporter Kip Doyle at kdoyleoth@inbox.com.)

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